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Warehousing & Fulfillment

How to Calculate Dimensional Weight and Why It Matters

Warehousing & Fulfillment
July 22, 2021
6 min read
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Learn how to calculate and reduce dimensional weight to lower shipping costs and improve margins.

What is Dimensional Weight or DIM Weight?  

Implemented in 2015 by UPS, FedEx, and USPS, dimensional weight is a formula used by carriers to determine the cost of shipping a package based on its volume. Put another way, DIM weight reflects a package’s volume, or the amount of space it occupies relative to its actual weight.  

For example, consider a low weight, high volume item like a box of cotton balls. While the box weighs relatively little, it takes up a disproportionate amount of space. 

Before 2015, shipping costs were based on a simpler formula that assigned a base shipping rate for distance (number of shipping zones) and weight (1-150 pounds). The heavier the package and/or further it traveled, the more expensive it would be to ship.

However, with the explosion of multichannel eCommerce, carriers realized their pricing technique left out a crucial component – the finite amount of storage space in their trains, aircraft, trucks, shipping containers, etc… A van can reach capacity quickly with very little weight. 

As a result, carriers implemented DIM weight to enhance their logistics networks and maintain profitability. Going forward, this meant the cost of shipping cotton balls could be higher than transporting dumbbells. 

Why is Dimensional Weight Important?

  • Last mile carriers use DIM weight to calculate shipping prices. Incorrectly reporting package dimensions can result in expensive shipping charge corrections
  • Dim weight pricing rewards shippers who package their products efficiently, which reduces fuel consumption and packaging waste.
  • Carriers like UPS work hard to optimize their fuel efficiency to both control costs for shippers and minimize their carbon footprint. DIM weight is one of many variables that they factor in when loading trucks and planning routes.

Whether fulfilment is handled in-house or outsourced, dimensional weight is a key component of shipping fees – one of eCommerce sellers’ largest expenses.

Accordingly, properly calculating dimensional weight, also called DIM weight or volumetric weight, and taking a strategic approach to decrease it, will reduce shipping costs. The resulting higher profits can be reinvested back into the business to meet consumers’ expectation for free 1-2-day shipping and take further action to minimize shopping cart abandonment rates

Below are answers to frequently asked questions about calculating dimensional weight and decreasing DIM weight. 

What is DIM Pricing?

Dimensional pricing is the cost to ship a package based on its volume, or dimensional weight. Carriers incorporate DIM weight into their pricing structure because the number of packages that can be transported depends on weight and the size of the boxes. 

Consequently, carriers will charge freight fees based on whichever is greater: DIM weight or the physical weight of the package. Pricing for a small, heavy product like a bowling ball or YBell would be based on actual weight, whereas DIM weight would be used for a large, lightweight item like a pillow. 

As such, small and heavy packages typically use actual weight more often, while DIM weight comes into play more with large and light packages due to their high volume. 

How is DIM weight calculated?

Dimensional weight is calculated by multiplying the length, width, and height of a package to determine its volume, or cubic size. For instance, a parcel 12 inches by 18 inches by 18 inches is 3,888 cubic inches. 

Then, the volume, or cubic size, of the package is divided into the carrier’s dimensional factor, also known as the DIM factor or DIM divisor. Fractions are rounded up to the next whole pound. 

What is DIM factor?

DIM factor, or DIM divisor, is a number used by carriers to calculate the dimensional weight of a square or rectangular package. A higher DIM divisor generally means a lower DIM weight and cost.

In other words, DIM factor represents the volume of a package per unit of weight, also referred to as cubic inches per pound, and is used to quickly determine the dimensional weight of any cubical parcel. 

For example, UPS uses a DIM factor of 166 for merchants paying retail rates and 139 for shops paying daily rates.

How can I reduce DIM weight?

Here are 3 ways to decrease dimensional weight:

1. Match Packaging to Merchandise’s Size and Fragility

Often this means switching from standard to well-designed custom packaging, which also saves money on package fillers like bubble wrap, shredded paper, and packaging peanuts. Besides reducing DIM weight, using custom packaging increases the rate of items arriving safely and intact, boosting customer loyalty and repeat business. HyVIDA, the world’s first hydrogen-infused carbonated beverage, experienced this first-hand after updating packaging to combat damage issues as part of improving their entire fulfilment process

2. Utilize Poly or Padded Mailers

Even collapsed boxes take up lots of space. On the other hand, poly and padded mailers make way for more inventory and stack well, resulting in dramatically lower DIM weight. Plus, they’re more eco-friendly and can be custom-printed, improving the branded shipping experience that is paramount for driving repeat business. Further, from a warehouse optimization perspective, padded and poly mailers do not require the assembly that boxes do, so shipments can be packed faster and more efficiently, as well.  

3. Align with an Outsourced Order Fulfilment Provider

Besides negotiating the best rates and service level agreements (SLAs) to guarantee nationwide 2-day delivery, fourth-party logistics (4PL) providers deliver value throughout the entire fulfilment process. The services of these strategic partners include optimizing the pack, ship, and return processes to reduce DIM weight and cut shipping costs. HyVIDA consolidated fulfilment through Ware2Go, a 4PL created by UPS to serve the needs of small and medium-size online merchants, to receive these benefits and more. Ware2Go’s flexible business model and nationwide distributed warehouse network fit into HyVIDA’s multichannel growth strategy, while the 4PL’s packaging SOPs reduced the beverage maker’s damages to zero. 

The Bottom Line

Decreasing dimensional weight is an important part of reducing the overall cost of shipping and increasing profits. To learn more about how Ware2Go’s on-demand fulfilment structure can help you reduce dimensional weight and shipping costs, please reach out to one of our shipping optimization experts.

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